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Pros and Cons of buying HUD Homes (cont'd)

The Cons of Purchasing HUD Homes

Although HUD homes obviously come with many excellent pros, buyers also must take time to consider the cons as well. Here are several of the cons that should be considered before deciding to purchase government foreclosures:

It is important to understand that HUD Homes are sold as-is.

Con #1 – Not All HUD Homes are an Excellent Deal

Many of the HUD foreclosure listings offer excellent deals to buyers on cheap homes. However, buyers must remember that not all HUD homes are an excellent deal. Before deciding to purchase a government foreclosure, remember the importance of doing due diligence.

Buyers should take the time to investigate the home price to ensure the home they are considering is a reasonable deal. Using the search service allows buyers to easily see if the home price listed is really a good deal. This enables buyers to choose the best deals instead of investing their money in homes that may not be a good deal in the current home market. Buyers should never assume that every HUD property is an excellent buy, which is why doing plenty of research is so essential.

Con #2 – Government Foreclosures are Sold “As Is”

It is important for buyers to realize that these government foreclosures are sold “As Is,” which means that the property may have suffered some damage or may need some repairs. In some cases, money may be offered in escrow to pay for certain repairs, but this is not always the case.

Buyers must consider the potential problems that come with purchasing one of these homes to decide if the home is worth the money it will cost to purchase it and the money needed for repairs

Con #3 – Problems Can Compound as Properties Sit

Last, as foreclosure listings sit, the problems they have can quickly compound, which is another con buyers must consider. While properties are usually secured to help keep them safe, certain problems may occur as the home sits waiting to be purchased. For instance, if a small leak exists around a window or in the roof of the home, a home in a warmer climate may quickly be overrun by mold, both on the outside and inside of the home’s walls.

For this reason, a good inspection on the property is always important, which is a topic that will be discussed further in a later chapter.

Next: Using agents to buy HUD homes